new value

There is a range of significant new challenges for business, including:

  • Commodity and energy price rises driven by supply constraints
  • Pricing of externalities such as carbon, pollution, water and waste
  • Volatility and uncertainty of costs, demand and operating conditions
  • Low cost competing products from China and elsewhere
  • Compliance and corporate social responsibility requirements imposed by regulators, shareholders, customers (eg Wal-Mart, P&G), consumers, and communities
  • The war for talent, now re-emerging after the economic slowdown
  • Emergence of new technologies in response to some of these issues that threaten existing business models

All of these are becoming an increasingly large part of corporate thinking – imposing new costs, offering new opportunities and requiring new approaches.

Many companies have been slow to respond to this changing world. This is understandable given the magnitude of the new challenges, day-to-day demands on staff, and the time required to stay abreast of (and test) new solutions and technologies.

Conversely, acting on the opportunities that these challenges present creates “new” value for companies through:

  • Saving costs (e.g. through better resource and asset utilisation)
  • More effective management and reduction of risk
  • Capturing new revenue streams (such as carbon credits)
  • Developing new differentiated products
  • Inventing new, more attractive/profitable business models
  • Increasing brand and shareholder appeal
  • Providing competitive advantage for customers (differentiating products by adding value for customers with their consumers)
  • Lifting regulatory standards to create barriers for competitors

It is this new value that Lavery Pennell works with clients to unlock.

For further information on new value, our paper “Unlocking New Value in a Changing World” explores in detail the value available and how to successfully realise it – including the combination of skills needed and the approach required.

Sustainability is inherently linked to New Value. Investor, shareholder and community concern about the environment and society is leading to many of the challenges that companies are facing. Conversely, sustainability also presents opportunities. While many companies are treating sustainability as a compliance function, leading organisations have embraced sustainability and now treat it as importantly as profitability, because they understand that it adds enormous value to the business. Laggards believe it adds cost to the business. Leaders have recognised its potential to motivate staff (and thereby improving productivity, attraction and retention), drive improved safety behaviour (minimising risks and creating a healthier workforce), create new differentiated products, satisfy shareholder demands for environmental and social improvements, increase brand appeal, secure contracts with sustainability-focussed customers like WalMart and P&G, and reduce costs (e.g. through energy efficiency and waste reduction). For further discussion on sustainability, please refer to our Profitable Sustainability page.

We have developed methodologies to help companies to capture value and competitive advantage from today’s challenges, and have unlocked new value in many client projects through our careers (refer to our Experience page for more details).